The SEC proposed significant changes to the public company reporting framework that would streamline filer categories and expand scaled disclosure accommodations for many reporting companies. Under the proposal, released yesterday, the SEC would eliminate the current “accelerated filer” category and move to two primary categories: large accelerated filers and non-accelerated filers. The proposal also would raise the threshold and seasoning requirements for large accelerated filer status and extend many existing smaller reporting company and emerging growth company accommodations to all non-accelerated filers.
Among other changes, non-accelerated filers would no longer be subject to the Section 404(b) auditor attestation requirement, and certain smaller non-accelerated filers would receive additional time to file periodic reports. The SEC stated that the proposal is intended to simplify the current filer status framework and reduce compliance burdens for smaller reporting companies while maintaining investor protections. See the Fact Sheet here.
Separately, the SEC also proposed broad registered offering reforms intended to facilitate capital formation and expand access to shelf registration and other offering flexibilities. The proposal would significantly broaden eligibility to use Form S-3 by eliminating the current 12-month Exchange Act reporting requirement and the $75 million public float threshold for unlimited shelf offerings. The SEC also proposed extending many registration and communication benefits currently available only to well-known seasoned issuers to a broader group of exchange-listed companies, expanding incorporation by reference eligibility on Form S-1, and preempting state securities law registration and qualification requirements for all registered offerings. The SEC stated that the amendments are intended to modernize the registered offering framework and reduce offering-related costs while maintaining investor protections. See the Fact Sheet here.
Comments on both proposals are due 60 days after publication in the Federal Register. See SEC Chairman Atkins Statement.
The Society is forming a working group and intends to submit a comment letter on each of these reforms. If you are interested in participating, please contact Shawn Filippi.
This post first appeared in the weekly Society Alert!